Summary: GAO discussed independent public accountants' (IPA) role in auditing employee benefit plans covered by the Employee Retirement Income Security Act of 1974 (ERISA). GAO found that: (1) over the past year, several groups have identified oversight and enforcement of employee benefit plans as an area subject to high risk; (2) the Department of Labor and the Internal Revenue Service (IRS) are responsible for enforcing ERISA; (3) despite Labor's efforts to correct weaknesses, many problems remain; (4) IRS has increased its examinations of employee plans, but places little emphasis on plans that are or may be underfunded and pose a risk to participants; (5) Labor officials said that more than 40 percent of benefit plan assets in a random sample of plans were not audited because of scope exclusion; (6) neither plan administrators nor IPA auditing the plans are required to report on internal controls and compliance with laws and regulations; (7) there is no clear requirement for reporting for regulators; and (8) IPA are not required to obtain peer review of their practice. GAO believes that: (1) the scope exclusion should be repealed to require IPA to audit all benefit plan assets; (2) plan administrators should be required to report on plans' internal controls and complaince with laws and regulations; (3) IPA should be required to report directly and promptly to regulators on employee benefits plan fraud and other violations when plan administrators fail to report such problems; and (4) IPA that audit employee benefit plans should submit to peer review.
